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- Cries for an imminent recession are getting louder by the day, but there are still ways to make money in the stock market by choosing companies set to thrive in a late-cycle environment.
- Goldman Sachs has identified the 17 companies it says will grow margins the most in 2019, which should make them good buys.
No matter how optimistic an economist may be these days, chances are they'll still tell you a recession is coming in the next year or two.
That's a view also shared by equity strategists all across Wall Street. To them, it's not a matter of whether we're going to get a recession — it's a question of when. The spectre of that eventual economic meltdown hangs over their commentary like a dark cloud, and also informs the majority of their investing recommendations.
That's certainly true for Goldman Sachs. And the good news there is that the firm has a veritable war chest of suggestions to help the average investor navigate choppy waters.
One way Goldman says to play an aging economic cycle is by buying stock in companies poised to see robust margin growth. After all, margins — and, by extension, earnings — normally get constrained in a late-cycle environment. So identifying the exceptions can be a profitable endeavor.
With that established, here are the 17 stocks Goldman says will expand their margins the most in 2019.
Note that these are the only companies in the universe screened by Goldman poised to see margin growth exceeding 100 basis points. They're listed in increasing order of 2019 expected margin expansion.
17. CintasMarkets InsiderTicker: CTAS
Sector: Industrials
Market cap: $19 billion
Year-to-date return: 4%
2019E margin growth: 103 basis points
Source: Goldman Sachs
16. Citrix SystemsMarkets Insider
Ticker: CTXS
Sector: Information technology
Market cap: $14 billion
Year-to-date return: 1%
2019E margin growth: 111 basis points
Source: Goldman Sachs
15. TripAdvisorMarkets Insider
Ticker: TRIP
Sector: Communications services
Market cap: $7 billion
Year-to-date return: 6%
2019E margin growth: 112 basis points
Source: Goldman Sachs
14. DowDuPontMarkets Insider
Ticker: DWDP
Sector: Materials
Market cap: $127 billion
Year-to-date return: 4%
2019E margin growth: 112 basis points
Source: Goldman Sachs
13. Automatic Data ProcessingMarkets Insider
Ticker: ADP
Sector: Information technology
Market cap: $57 billion
Year-to-date return: 0%
2019E margin growth: 114 basis points
Source: Goldman Sachs
See the rest of the story at Business Insider
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